Gold was steady on Friday and within sight of its highest in a week scored the previous day as investors began to regain confidence despite the metal's repeated failure to approach $700 an ounce.
But trading was subdued with Japanese and Chinese consumers away for a Golden Week holiday and ahead of the release of US payrolls data, which may offer clues to the direction of the dollar and gold. "I expect a test of the $693 level again before long, which if broken should see us targeting the $700 level once more," said Darren Heathcote of Invested Australia in Sydney.
Spot gold was at $680.75/681.50 an ounce, hardly changed from $681.10/681.60 late in New York on Thursday, when it jumped to $682.70 on fund buying, a mining strike in gold producer Peru as well as a rally in base metals.
"I believe the positive gold trend remains intact. It's clear the plethora of Asian holidays this past week, coupled with reported physical selling in London, has surprised prices," said Heathcote.
"However the physical selling now looks to be on the wane, and despite a stronger dollar versus the euro, gold has regained much of the lost ground."
Gold rallied to its highest level in 26 years to $730 in May 2006 as investors diversified their portfolios on Middle East tensions, record-high oil prices that raised fears of inflation and uncertainties over the US dollar's outlook.
Gold has made several attempts to re-test $700 but gains had been capped by profit taking. The metal hit an 11-month high of $693.60 on April 23, but then dropped to a one-month low around $667 on Wednesday due to a surging dollar.
"I think it's likely to reclaim $685 in the near term," said David Moore, a commodity strategist at the Commonwealth Bank of Australia.
"I think the investor support for gold appears to be there for the time being, which may support the gold price further in the near term," he said.
The US dollar was firm on Friday as upbeat economic data helped it cling to three days of gains, though its immediate fate hangs on the result of the notoriously volatile US payrolls report.
A surprisingly strong survey of the US service sector, coupled with a rise in productivity and a drop in labour costs, lifted the dollar on Thursday and led the market to further trim the chances of a rate cut from the Federal Reserve.
The euro was steady at $1.3550 on Friday, having slipped 0.3 percent the previous session. Platinum rose to $1,299/1,304 an ounce from $1,295/1,300 an ounce. Palladium rose to $371/376 an ounce from $369/373 an ounce. Silver gained to $13.39/13.42 an ounce from $13.37/13.40.
Comments
Comments are closed.